You are the auditor of SAFE Ltd., which is in the business of supplying food products to various airline companies operating in aircrafts in…

As per SA 560, “Subsequent Events", the auditor shall perform audit procedures designed to obtain sufficient appropriate audit evidence that all events occurring between the date of the financial statements and the date of the auditor's report that require adjustment of, or disclosure in, the financial statements have been identified. The auditor is not, however, expected to perform additional audit procedures on matters to which previously applied audit procedures have provided satisfactory conclusions. The auditor shall perform the procedures required in the above paragraph so that they cover the period from the date of the financial statements to the date of the auditor's report, or as near as practicable thereto. In the given case, the nationwide strike and suspension of domestic flight operations in April 2025, though occurring after the balance sheet date, constitutes a significant subsequent event that may impact the recoverability of receivables and valuation of inventory. Being the auditor of SAFE Ltd., to ensure that all subsequent events are considered so that financial statements for the year ending 31.03.2025 represent a true and fair view, the auditor shall take into account the auditor's risk assessment in determining the nature and extent of such audit procedures, which shall include the following: Obtaining an understanding of any procedures management has established to ensure that subsequent events are identified.Inquiring of management and, where appropriate, those charged with governance as to whether any subsequent events have occurred which might affect the financial statements.Reading minutes, if any, of the meetings, of the entity's owners, management and those charged with governance, that have been held after the date of the financial statements and inquiring about matters discussed at any such meetings for which minutes are not yet available.Reading the entity's latest subsequent interim financial statements, if any. When, as a result of the procedures performed as required above, the auditor identifies events that require adjustment of, or disclosure in, the financial statements, the auditor shall determine whether each such event is appropriately reflected in those financial statements.